performance bond

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Related to performance bond: Bid bond

Performance bond

A surety bond between two parties, insuring one party against loss if the terms of a contract are not fulfilled. Usually part of a construction contract or supply agreement.

Performance Bond

A bond that a company issues to another guaranteeing repayment in case some project fails. For example, suppose a company hires a construction firm to build an apartment building. The construction firm may issue a performance bond to the company. If the apartment building is not constructed according to specifications, the company will not incur any losses because the construction company must repay the bond. This reduces the risk to the bondholder that another party to a contract will not fulfill its obligations.

performance bond

An insurance policy often required on government construction projects.If the contractor does not perform the work it contracted to do, the insurance company will either hire someone else to complete the job or will pay off the resulting damages, up to policy limits. Sometimes it is inaccurately called a performance and completion bond. Technically, liability under a performance bond is contingent on the contracting party paying according to the terms of its construction contract.Contrast with completion bond,where the contracting party does not have to pay anything to the insurance company,even though it might have been obligated to pay the contractor. As a result, most bonds are performance bonds and it is very difficult to obtain a completion bond.

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Sheikh Mohammed has amended a law governing performance bonds in Dubai
After an Employer makes a call on a Performance Bond, the Contractor may have recourse to one of the following two remedies:
The Moser Group, which provided the performance bond for Ashby's vehicle, was also a business venture of Mr.
ARIX attempted to garnish Universal's performance bond held by DEQ.
The Ombudsman said the performance bond should have amounted to more than P2 million.
PERFORMANCE BONDS EXPLAINED | A performance bond is issued by |an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.
The study results suggest that the minimum contract value that requires a performance bond should be raised to between $1 million and $10 million and that the cost of performance-based prequalification is low compared to the cost of the premiums for performance bonds.
The owner also sued the surety on the performance bond, also claiming that the pay on the bond, also claiming that the owner breached the contract.
By merely converting the bid security of P500,000 to performance bond, the respondents exposed the city government to the risk of Comfac not performing its obligation,' according to its resolution.
Trade Contract Bids must include the cost of your Performance Bond and Payment Bond.
Prior to execution of the contract, the successful bidder shall be required to furnish, at his expense, a Performance Bond, in such form as prescribed by the Authority, in the Amount of $200,000, or, in lieu of such Performance Bond, a Certified Check, or a Letter of Credit (Letter of Credit Expiration date shall be one-month past the contract expiration date), satisfactory to Suffolk County Water Authority together with an Indemnification Agreement in such form as prescribed by the Authority.

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